2016 (11) TMI 981 - HC - VAT and Sales Tax

Non service of notice - Rajasthan Tax Board, a statutory body - Held that - the declaration form ST-18C was filed before the AO himself on a show cause notice and judgment of apex court in State of Rajasthan & Another v. D.P. Metals 2001 (10) TMI 881 - SUPREME COURT OF INDIA squarely applies, where it was held that The quantum of penalty under the circumstances enumerated in section 78(5) cannot, in our opinion, be regarded as illegal. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the Legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes article 19, courts would naturally be circumspect and cautious as such there cannot, in the present case, be any valid challenge to the rate of penalty provided for in section 78(5) of the Act. Petition dismissed - decided against petitioner.

Summary

Issues:
1. Imposition of penalty under section 78(10)(a) of the Rajasthan Sales Tax Act, 1994.
2. Appeal against penalty imposition.
3. Consideration of necessary documents and intention to evade tax.
4. Application of relevant legal judgments.
5. Dismissal of the appeal by the Tax Board.
6. Question of law arising from the Tax Board's order.

Imposition of Penalty:
The judgment revolves around the imposition of a penalty under section 78(10)(a) of the Rajasthan Sales Tax Act, 1994. The case involved a vehicle intercepted on 5.8.2004, where the driver failed to produce the declaration form ST-18C and did not stop at the check-post initially. The Assessing Officer imposed a penalty considering these factors.

Appeal Against Penalty:
The penalty imposition was challenged before the Dy. Commissioner (Appeals), who, after considering the filing of the declaration form ST-18C and other evidence, decided in favor of the petitioner, thereby deleting the penalty. Subsequently, the Revenue appealed to the Tax Board, which also dismissed the appeal based on the facts considered by the Dy. Com. (Appeals) and a previous court judgment.

Consideration of Necessary Documents and Intention to Evade Tax:
The judgment emphasized the importance of considering whether the goods were being carried with the intention to evade tax. The filing of necessary documents, such as the declaration form ST-18C, and the absence of tax dues were crucial factors in determining the intention behind carrying the goods.

Application of Relevant Legal Judgments:
The court referred to legal precedents, including the judgment in the case of State of Rajasthan & another v. Tajiander Pal, to support its decision. The judgment highlighted the discretionary nature of imposing penalties under specific sections and the requirement for a nexus between tax evasion and the breach of relevant provisions.

Dismissal of the Appeal by the Tax Board:
The Tax Board dismissed the Revenue's appeal, relying on the facts considered by the Dy. Com. (Appeals) and the legal principles established in previous court judgments. The decision was based on a thorough review of the evidence and legal framework.

Question of Law Arising from the Tax Board's Order:
The petitioner contended that questions of law arose from the Tax Board's order, arguing that the penalty imposition was justified due to suspicious behavior by the driver. However, the court found that the issue was already settled against the Revenue, and no new question of law emerged from the impugned order, leading to the dismissal of the petition.